GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: Steady to 2 cents higher.
Wheat: 2 to 4 cents higher.
GENERAL COMMENTS: Wheat led strength overnight with soybeans following modestly to the upside. Corn saw additional profit-taking as prices bounce between key support and resistance. Outside markets are supportive this morning as front-month crude oil futures are modestly higher while the U.S. dollar index is around 140 points lower.
World Weather Inc. Sunday reported U.S. upper Midwest frost and light freezes during the weekend “likely had a very low impact on summer crop production.” Lowest temperatures were just slightly below freezing with most of that in eastern North Dakota and northern Minnesota. Most of the lowest temperatures were 30-32 degrees, while other readings were in the middle and upper 30s. Lowest temperatures in Iowa were mostly in the upper 30s and lower 40s with a few readings of 34, which may have resulted in light frost in the north part of the state. Saskatchewan, Manitoba, western North Dakota and eastern Montana with a few areas in northwestern Nebraska and neighboring areas of southwestern South Dakota reported lows in the upper 20s and lower 30s. Damage was greatest to immature late-season canola, corn and soybeans produced in southeastern Saskatchewan and to a lesser degree from central Saskatchewan to southern Manitoba. Damage in eastern Montana and western North Dakota “was light, although not absent, depending on the crop and the duration of subfreezing temperatures.”
China imported a record volume of soybeans for August to build a buffer against possible shortages as a protracted trade war with the U.S. — its second-largest supplier — drags on, reported Bloomberg. China, the world’s biggest soybean importer, purchased 12.28 million MT in August, the highest ever recorded for the month, shoring up local availability before U.S. supplies begin to dominate the global market. “China has traditionally sourced a large share of its soybean imports from the U.S., but ongoing trade tensions have pushed it to favor Brazil. The recent purchases reflect a strategic move to reduce reliance on the U.S. shipments ahead of the export season that’s expected to peak in the coming months,” said the report. Abundant imports, mainly from Brazil, have left Chinese crushers better prepared for a winter possibly without U.S. soybeans. China’s stockpiles of imported soybeans totaled about 6.8 million tons as of last Friday, near the highest since March, said Bloomberg.
China’s export growth slowed to the weakest in six months as a slump in shipments to the U.S. deepened again, although a surge in sales to other markets kept China on track for a record trade surplus of over $1.2 trillion this year. Overall Chinese sales abroad rose 4.4% in August from a year earlier to $322 billion, according to a statement from the General Administration of Customs on Monday. Exports to the U.S. fell 33%, the fifth month of double-digit declines. China’s imports climbed 1.3% in August, leaving a trade surplus of $102 billion. China’s surplus is still on course to exceed last year’s record of almost $1 trillion, with overseas sales making up for weaker domestic demand.
CORN: December corn continue to bounce between $4.25 resistance and $4.14 3/4 support. A break and close outside of that range likely dictates the near-term direction, but prices continue to trend higher on the daily bar chart as it stands now.
SOYBEANS: November soybeans saw relative strength overnight. Bulls are looking to overcome 40-day moving average resistance at $10.30 1/2 before tackling Friday’s high of $10.37 1/2. Support comes in at $10.25 then $10.21 1/2.
WHEAT: December SRW wheat saw modest profit-taking overnight. Bulls are looking to overcome resistance at $5.24 1/4, the 10-day moving average, on persistent strength. Support comes in at last week’s contract low of $5.14 1/2 on a reversal lower.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Higher.
CATTLE: Cattle futures are expected to open with a mostly weaker tone in a continuation of recent selling pressure. Still, cash fundamentals remain strong, with cash cattle trading roughly steady with the prior week as of mid-day Friday, which could limit the downside. Choice beef slid $3.45 to $410.76 Friday while Select dropped $2.58 to $358.19.
HOGS: Lean hog futures are expected to open higher in a continuation of recent strength. Hog futures have shown resilient strength recently and the cash market is beginning to follow. The CME lean hog index fell a nickel to $105.92 as of Sept. 4, giving up the prior days gain. Pork cutout meanwhile surged $2.55 to $115.87 Friday, led by gains in picnics and loins.